Jay introduces drug bill meant to help seniors, cut deficit

CHARLESTON, W.Va. -- Sen. Jay Rockefeller, D-W.Va., introduced legislation Tuesday that would help cut the federal deficit, protect seniors' health care and reduce Medicare Part D drug costs that he says would keep prescription drug companies from getting more profits than they deserve.

The Medicare Drug Savings Act would cut $141.2 billion in spending over the next 10 years, helping reduce the deficit and avoiding reckless legislative proposals to cut Medicare benefits.

"For years, drug companies have received a taxpayer-funded windfall on their prescription drugs for people eligible for both Medicare and Medicaid, allowing them to charge higher prices than ever before for low-income seniors," Rockefeller said during a Senate press conference announcing the new legislation.

"This bill would make sure drug companies no longer receive this unnecessary and excessive payment," he said. "It would responsibly help to reduce the deficit.

"It's about putting low-income seniors and people with disabilities before pharmaceutical profits, while improving care and helping to guarantee the future of Medicare and Medicaid."

Sen. Tammy Baldwin, D-Wisc., a cosponsor of the bill, called it "a win for seniors. It is a win for Medicare, because we are able to produce substantial savings without cutting any benefits."

Unlike most states, Wisconsin has used its bargaining power as a state, and its own senior care program, to cut pharmaceutical costs.

"Our state continues to bargain with the pharmaceutical companies," Baldwin said. "Last year alone, we saved Wisconsin seniors $80 million."

Sen. Angus King, I-Me., wants to be able to bargain for better rates for Medicare.

"We have a responsibility to be effective and thrifty, to make their money go as far as possible," King said. "We are not being very smart when it comes to being consumers of drugs in the Medicare program.

"Medicaid and the VA [Veterans Administration] have significant rebates. They buy drugs in very large quantities," King said.

He also criticized rising health-care costs in general.

"The federal budget deficit is all about health-care costs. It is not the growth of Pell Grants, or the national parks, or the EPA [Environmental Protection Agency].

"What do we do about health-care costs, not just for the federal government, but for all of us?" King asked. "How do we lower health-care costs for everybody?"

Dan Adcock, director of government relations and policy for the National Committee to Preserve Social Security and Medicare, supports the new legislation for several reasons.

"One of the things that gets lost in the debates is that the average Medicare beneficiary has an income of $23,000 a year and spends 20 to 40 percent of that money for health-care costs out of pocket," Adcock said.

In recent years, Adcock said, "We have been fighting to control Medicare costs with one hand tied behind our back. We should be able to negotiate the costs for these drugs like any other employer and get discounts."

Ariel Gonzales, a spokesman for AARP, expressed the organization's "strong support for the Medicare Drug Savings Act."

Gonzales urged Congress to think about half of all seniors who live on annual incomes of less than $23,000 a year. Prescription drugs play a major role in curing diseases and making Americans healthy.

"Medicare does not currently benefit, like other programs do, from rebates like the one proposed in this bill," Gonzales said.

He said the legislation would save $141 billion over the next 10 years, without negatively impacting Medicare Part D benefits.

The new legislation, Rockefeller said, would require pharmaceutical companies to give rebates to nearly 90,000 West Virginians eligible for the low-income subsidy plan in the Medicare Part D Prescription Drug Program.

Today, drug manufacturers provide rebates for other Medicaid beneficiaries, Rockefeller said, and previously provided the same rebates for people eligible for both Medicare and Medicaid.

After Medicare Part D was created in 2006, "drug companies no longer had to provide these rebates and they have been unfairly making more money off of prescription drugs ... at the taxpayers' expense," Rockefeller said.